Sumin Dutta Vs State of West Bengal & Ors. (Calcutta High Court)
Summary: The Calcutta High Court considered a writ petition challenging the legality and validity of an adjudication order dated 24.04.2024 passed under Section 73 of the West Bengal Goods and Services Tax Act and the Central Goods and Services Tax Act, 2017. The petitioner submitted that a show cause notice in Form DRC 01 dated 26.12.2023 demanding tax, interest and penalty had been uploaded on the GST portal under the “Additional Notice and Orders” tab, due to which the petitioner was compelled to submit the reply much after the due date.
The petitioner further submitted that, without considering the reply, the adjudicating authority passed an ex parte adjudication order dated 24.04.2024 and that the petitioner came to know of the order only after receiving a phone call from the GST Department on 10.07.2026. The State respondents opposed the submissions, contending that the reply was filed belatedly, that no request for personal hearing had been made and that the Department proceeded on the basis of the reply. The petitioner relied upon the Division Bench judgment in Goutam Bhowmik v.- State of West Bengal, reported in (2024) 158 taxmann. Com 399 (Calcutta), concerning the requirement of an opportunity of hearing under Section 75(4).
The Court found that the petitioner had made out a prima facie case and observed that the show cause notice and adjudication order had been uploaded only under the “Additional Notice and Orders” tab and no separate intimation had been given, compelling the petitioner to file the reply at a belated stage. The Court consequently quashed and set aside the adjudication order dated 24.04.2024 and directed respondent no. 3 to reconsider the grounds taken in the reply dated 13.03.2024, afford the petitioner an opportunity of personal hearing and pass a fresh reasoned adjudication order in accordance with law within 12 weeks.
Cases Discussed
- Goutam Bhowmik v.- State of West Bengal reported in (2024) 158 taxmann. Com 399 (Calcutta)
Petitioner Was Represented By: Mr. Himangshu Kumar Ray.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. Affidavit of service filed in Court today be kept with the record.
2. The present writ petition has been filed challenging inter alia, the legality and validity of the adjudication order dated 24.04.2024 passed by the respondent No. 3 under Section 73 of the West Bengal Goods and Services Tax Act (hereinafter referred to as the said ‘WBGST Act’) and the Central Goods and Services Tax Act, 2017(hereinafter referred to as the said ‘CGST Act’), whereby the appeal of the petitioner has been dismissed on ground of limitation.
3. Learned counsel for the petitioner submits as follows;
i. That a show cause notice in Form DRC 01 dated 26.12.2023 has been issued to the petitioner demanding tax, interest and penalty.
ii. The said notice has been uploaded on the GST portal under the tab ‘Additional Notice and Orders’. Due to this, the petitioner was compelled to submit the reply much after the due date.
iii. Without considering the reply the adjudicating authority passed an ex parte order of adjudication dated 24.04.2024 which was accordingly uploaded in the ‘Additional Notices and Orders’ tab.
iv. The petitioner came to know about the passing of the order of adjudication dated 24.04.2024 only after receiving a phone call from the GST Department on 10.07.2026.
v. That the entire proceedings and the impugned order are contrary to law and have been passed in violations of principles of natural justice and without due compliance with the procedure prescribed under the said Act.
4. Learned counsel appearing for the State respondents vehemently opposes the submissions made by the petitioner and submits that the petitioner filed a reply at a belated stage. The petitioner did not make any request for an opportunity of personal hearing, thus the GST Department proceeded on the basis of the reply filed by the petitioner.
5. It is further submitted that there is no specific rule prescribed under the statute to provide any opportunity of hearing to the petitioner prior to the passing of an order of adjudication.
6. In this context the petitioner places reliance upon paragraph nos. 7 to 9 of a Division Bench Judgment in Goutam Bhowmik –v.- State of West Bengal reported in (2024) 158 taxmann. Com 399 (Calcutta), which are reproduced below:
“7. From bare perusal of the show cause notice under Section 73 of the WBGST/CGST Act, 2017, it is evident that no opportunity of hearing was afforded by the proper officer before passing the impugned assessment order for the Financial Year 2018-19 i.e., from April 2018 to March 2019. Although in the show cause notice dated 15.01.2021 under Section 73 of the Act it was specifically mentioned by the proper officer addressing the petitioner that “You may appear before the undersigned for personal hearing either in person or through authorised representative for representing your case on the date, time and venue, if mentioned in table below” but in the table neither dated and time nor venue for personal hearing was mentioned.
8. Section 75(4) of the WBGST/CGST Act, 2017 specifically provides as under:-
“An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”
9. Thus, as per provisions of sub-section 4 of Section 75 of the WBGST/CGST Act, 2017, when the proper officer contemplated a decision against the petitioner/assessee, then it was mandatory for him to afford an opportunity of hearing. From the perusal of the show cause notice dated 15.01.2021, it is evident that the proper officer has declined to afford an opportunity of hearing to the petitioner inasmuch as it has not communicated any date, time and venue of hearing.”
7. From the plain reading of Section 75(4) of the CGST Act, 2017 it clearly envisages that an opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
8. In the present case, the petitioner was denied of personal hearing which is evident from the summary of show cause notices dated 24.8.2023 & 26.12.2023 respectively.
9. Having heard the parties and upon perusing the records made available this Court observes as follows;
i. The petitioner has been able to make out a prima facie case.
ii. The fact that show cause notice and adjudication order have been uploaded only under the tab Additional Notice and Orders’ and no separate intimation has been given therefore, the petitioner has been compelled to file the reply at a belated stage.
10. In view of the above this Court directs as follows:
a. The adjudication order dated 24.04.2024 is hereby quashed and set aside.
b. Respondent no. 3 is directed to revisit the issue by considering the grounds taken in reply dated 13.03.2024.
c. Respondent no. 3 shall afford an opportunity of personal hearing to the petitioner and pass a fresh reasoned adjudication order in accordance with law within 12 weeks from date. Such decision shall be communicated to the petitioner within a week thereafter.
11. With the above observations and directions this writ petition stands disposed of.
12. Since no affidavit in opposition has been called for, the allegations contained in the writ petition are deemed to have been denied and not admitted.
13. Urgent Photostat certified copy of this order be supplied to the parties, if applied for, as early as possible.
